Guillermo Baez Espinosa - Page 8

                                        - 8 -                                         

          section 871(a); (2) if the income is effectively connected with a           
          trade or business within the United States, or if an election is            
          made to treat the income as effectively connected, the tax is               
          computed pursuant to section 871(b), on net rental income at the            
          graduated rates prescribed by section 1, provided that the                  
          taxpayer has filed a return as required by section 874(a); and              
          (3) where the income is effectively connected and the taxpayer              
          fails to file a tax return as required by section 874(a), the tax           
          is computed on gross rental income at the graduated rates                   
          prescribed in section 1.                                                    
               Petitioner, while recognizing that section 874(a) disallows            
          deductions if no return is filed, asserts that he did file                  
          returns for the years in question.  The issue, therefore, is                
          whether the returns submitted on October 7, 1993, after                     
          respondent notified petitioner that he had not filed returns and            
          after respondent prepared returns for petitioner but before the             
          notice of deficiency was issued, satisfy the requirements of                
          section 874(a).                                                             
               On its face, section 874 contains no time limit within which           
          a nonresident alien must file an income tax return.  For taxable            
          years ending after July 31, 1990, the regulations explicitly                
          create a timely filing requirement.  Section 1.874-1(b)(1),                 
          Income Tax Regs., as amended by T.D. 8322, 1990-2 C.B. 172, 173,            
          provides, inter alia, that                                                  





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011